Craig Zeller said he remembers walking the Magnolia property in Charleston in 1990. It was his first assignment with the U.S. Environmental Protection Agency out of college.
“There were several feet of creosote in open ditches on Milford and Hagood streets,” Zeller said of the flammable, oily liquid used to treat processed wood. “I’d never seen anything like it in my life.”
The swath of land along the Ashley River, now known as Magnolia, housed industrial plants decades ago. A wood treatment facility and fertilizer plants operated there. Their operations caused creosote, lead and arsenic to seep into ground, contaminating the surrounding soil, waterways and ecosystems.
Lawsuits and environmental mitigation ensued in the years following the plant closures. The EPA and state environmental agencies began remediation work on the property in the 1980s and 1990s.
City officials and developers took note in the early 2000s. They saw an opportunity to turn the roughly 180-acre site, located at the end of the Wagener Terrace neighborhood on the Upper Peninsula, into a place the city could grow.
Investors acquired the former industrial sites. Plans moved forward and then the recession hit. They defaulted on loans, and the properties went into bankruptcy.
Several land deals are now in the works as those properties emerge from bankruptcy court. New investors once again hope to move forward on the pre-recession plan to turn the former industrial dumping ground into a mixed-use community in downtown Charleston.
“The old footprint has essentially been reassembled, and that’s exciting,” Zeller said of the planned Magnolia community. “That means essentially for the first time since 2008 — after about a 10-year pause — it’s back rolling.”
A group of investors, including Summerville-based WestRock Land and Development, and Atlanta-based Pope and Land Enterprises Inc. and Branch Properties, formed Ashley River Investors several years ago to pursue the redevelopment of the Magnolia property. It now owns, or has the right to acquire, most of that land.
The investment group bought the former Ashepoo Fertilizer Plant property last year. It has an agreement in place to acquire most of the remaining properties, including the 100-plus-acre former Koppers Wood Treatment Facility property and several smaller, nearby parcels, said Gerald Pouncey Jr., an environmental attorney who represents Ashley River Investors.
Pouncey, a senior partner with Morris, Manning & Martin in Atlanta, said lingering environmental cleanup on those other sites prevented the group from already closing on them.
The only remaining site within the Magnolia footprint, known as the former Columbia Nitrogen Fertilizer Plant property, recently emerged from bankruptcy court. Court documents show Houston real estate development firm Highland Resources plans to acquire the 31 acre-site from the original investors for $8.6 million.
Highland Resources has a purchase agreement in place to also buy the land controlled by the Ashley River Investors group, Pouncey said. Highland Resources will be the new Magnolia owner and developer if the sale closes in the first quarter of 2018 as planned.
If the sale fails, Ashley River Investors can either seek a new buyer or develop the site. WestRock declined to comment on the land deals amid negotiations.
Charles Wolcott, president and CEO of Highland Resources, said his firm wants to pursue the longtime plan of creating a large community for Charleston’s growing population.
Magnolia’s waterfront views and its proximity to Interstate 26, downtown Charleston and growing employment centers enticed Wolcott to pursue the acquisition. He said it is too early in the process to share details.
“We see a mix of uses, and we plan to work collaboratively with the city and with neighborhood groups to get input. ... The company has extensive experience in developing properties such as Magnolia, including remediating brownfield sites and working closely with local communities on a cooperative approach on land development,” Wolcott said.
The ultimate land owner will invest an additional $30 million to environmentally improve the Koppers site, Zeller and Pouncey said. While the companies responsible for the pollution have already paid out tens of millions of dollars to remove toxins from the site, more work is needed to prepare the land beyond industrial needs for residential uses.
The additional work involves mixing the soil and solidifying much of it into a concrete block, and raising the property up by more than 1 foot to prevent any further creosote from leaching into the soil or waterways.
“It makes the remedy better and it supports redevelopment, which — it’s cliche, but it’s win-win,” said Zeller, now a remedial project manager for the EPA’s Superfund Division who has worked on the site for nearly 30 years.
The city wants to see the project move forward to provide more housing options, commercial spaces and a waterfront park for existing and incoming residents, said Jacob Lindsey, director of Charleston’s Planning, Preservation and Sustainability Department.
A percentage of the Magnolia development would be set aside for affordable housing.
“It is a perfect location to grow,” Lindsey said. “That was the same 15 years ago as it is today.”
The zoning regulations agreed upon over a decade ago still stand today. Future owners can move forward with existing zoning if they choose; the planned unit development zoning allows for residential, commercial, retail, hotel, parking and green spaces.
The site already has two access points to handle an influx of daily residents and employees on its streets — entry points along King Street Extension and a bridge built for the project nearly a decade ago, connecting Magnolia to Wagener Terrace.
“I’ve been working on this project most of my career,” Zeller said. “What’s really rewarding about it is I had a hand in the actual cleanup, the investigation ... and more than 20 years later, to talk about turning this into a mixed-use development that citizens can enjoy, and people can live in and walk their dogs and go shopping. ... That’s a pretty nice end to it.”
This story originally appeared in the Dec. 11, 2017, print edition of the Charleston Regional Business Journal.